nkolen – Page 17 – Consumer Financial Services Watch

New Cybersecurity Executive Order to Impact Financial Services Sector

Feb 19 2013

By: David A. Tallman , Michael A. Cumming

On February 12, 2013, President Obama signed an executive order (“Order”) aimed at enhancing the cybersecurity of the nation’s “critical infrastructure” (generally defined as those “systems and assets” whose incapacity “would have a debilitating impact on security, national economic security, national public health or safety, or any combination of those matters”). An accompanying policy directive designates the financial services sector as one of sixteen “critical infrastructure sectors” and, among other things, directs the Commerce Department’s National Institute of Standards and Technology (“NIST”) to collaborate with industry representatives in order to create a voluntary “cybersecurity framework.” The framework must be “technology neutral” and focused on “cross-sector security standards and guidelines applicable to critical infrastructure.” Read More

Proposed Massachusetts Regulations Address Mandatory Modification Review

Feb 12 2013

By: Gregory N. Blase , Nanci L. Weissgold , Kerri M. Smith

Do regulations recently proposed by the Massachusetts Division of Banks disregard servicers’ duties under servicing agreements when considering borrowers for a modification under the Commonwealth’s new mandatory modification review statute? Read More

Ginnie Mae Goes Electric

Feb 05 2013

By: Phillip L. Schulman , *Nathan Pysno
*Mr. Pysno is not admitted to the D.C. Bar; currently admitted to the Maryland Bar.

Beginning January 1, 2013, issuers of Government National Mortgage Association (“Ginnie Mae”) mortgage-backed securities must submit their insurance and annual audited financial statements electronically. From June 1, 2012 through December 31, 2012, issuers had the option to submit their documents electronically or by mail in paper form. Before June 1, 2012, Ginnie Mae only accepted submissions in paper form. Documents that must be submitted electronically include annual audited financial statements, including required supplemental reports, fidelity bond insurance renewal forms, and errors and omissions insurance renewal forms.

Additional information on filing procedures, file-naming formats, and other instructions is available in Ginnie Mae’s Mortgage-Backed Securities Guide 5500.3 Rev. 1, Appendix VI-20 and in All Participant Memorandum (APM) 12-09: Electronic Submission of Issuers’ Insurance and Annual Audited Financial Documents. Both of these documents are available on the Issuer Resources page of Ginnie Mae’s website.

FHA Investing Mortgagees No Longer Required to Provide Compliance Report

Feb 05 2013

By: Phillip L. Schulman, *Nathan Pysno
*Mr. Pysno is not admitted to the D.C. Bar; currently admitted to the Maryland Bar.

A recent change to the HUD Office of the Inspector General Audit Guide has removed the requirement that all FHA investing mortgagees submit reports on internal controls and compliance.

An investing mortgagee or lender may purchase, sell, and hold FHA-insured mortgages but cannot originate or fund FHA loans. An investing mortgagee may service FHA loans with approval of the HUD Secretary. Read More

Appraisers’ Customary and Reasonable Fees – Louisiana’s Power Grab

Feb 04 2013

By: Nanci L. Weissgold , Morey Barnes Yost , *Christopher Smith
*Mr. Smith is a law clerk, currently admitted to the New York Bar.

Author’s Note: In response to the publication of the below post, a representative for the Louisiana Real Estate Appraisers Board advised us that the version of the proposed rules discussed in our original post are being withdrawn. A revised version of the proposed rules, based on comments received from appraisal management companies in response to the Board’s original proposal, is scheduled for publication in the Louisiana Register on or about February 20. We will update our analysis after the revised proposed rules are published, when they will be open for further comment.

A recently proposed Louisiana Real Estate Appraisers Board (“Board”) rule has created uncertainty in the Louisiana appraisal market regarding appraiser compensation. In proposing a rule that creates obligations inconsistent with those existing under federal law and rules, the Board has ignored the intent of the federal rule, caused conflict between state and federal law, and likely increased compliance costs for appraisal management companies (“AMCs”) – costs that may be passed along to lenders and consumers.

FHA Annual Recertification Attestation

Jan 11 2013

By: Phillip L. Schulman

Each year, an FHA-approved mortgagee’s principal, chief executive or in-house general counsel signs an attestation as part of the Federal Housing Administration’s annual certification process that accompanies payment of the mortgagee’s yearly verification fees. Some administrative assistant puts the attestation in front of the mortgagee’s president or executive vice-president and sometimes without thinking, the executive casually attests that the company complies with all HUD-FHA regulations and no state or federal agency lifted its license during the past year. In fact, the attestation is quite expansive and mortgagees have been finding themselves hauled before the HUD Mortgagee Review Board and its executives threatened with debarment proceedings for failing to read the fine print. Read More

Private Student Lenders, Get Ready for Your Final Exams: The CFPB Releases Its Student Lending Examination Procedures

Dec 21 2012

By: Stephanie C. Robinson, Rebecca Lobenherz

This week the Consumer Financial Protection Bureau (“CFPB”) released an addendum to its Supervision and Examination Manual focused on the examination of private student lenders. The Student Lending Examination Procedures, available on the CFPB’s website, provide guidance to CFPB examiners on how to review private student lenders for compliance with consumer financial protection laws. The CFPB has supervisory authority over both very large banks and nonbanks that make private student loans. Read More

FHA Announces Upcoming Changes to Strengthen the Mutual Mortgage Insurance Fund

Dec 03 2012

By: Phillip L. Schulman, Krista Cooley

The U.S. Department of Housing and Urban Development’s recently announced that an independent actuarial review of the FHA Mutual Mortgage Insurance (MMI) Fund found that the Fund’s capital reserve ratio has fallen to -1.44%, which represents a negative economic value of $16.3 billion. In the wake of this announcement, HUD unveiled a series of aggressive steps it intends to take over the next several months. According to the Annual Report provided to Congress earlier this month, FHA lenders will have to contend with several policy changes to FHA origination and servicing requirements in the coming year, as well as to the Home Equity Conversion Mortgage (HECM) program. Read More

FHA and RHS Respond to Hurricane Sandy

Nov 30 2012

By: Holly Spencer Bunting , Kathryn M. Baugher

In the wake of Hurricane Sandy, both the U.S. Department of Housing and Urban Development (“HUD”) and the Rural Housing Service (“RHS”) have issued guidance intended to help homeowners with government insured or guaranteed loans who were affected by the storm. With regard to loans insured by the Federal Housing Administration (“FHA”), the guidance is a combination of reminders about existing relief or insurance programs available to assist disaster victims and new policies designed to aid borrowers in the process of obtaining FHA financing for properties impacted by natural disasters. With regard to RHS-guaranteed loans, the guidance focuses on foreclosure and loss mitigation relief available to borrowers impacted by Hurricane Sandy. Read More

FHA Issues Annual Financial Report to Congress

Nov 27 2012

By: Phillip L. Schulman, Krista Cooley

On Friday, November 16, 2012, the U.S. Department of Housing and Urban Development released its 2012 Annual Report to Congress and announced that the FHA Mutual Mortgage Insurance (MMI) Fund suffered a $16.3 billion deficit. In addition, for the fourth year in a row, the MMI Fund has failed to meet its 2% statutory reserve amount, an amount required under the National Housing Act to be held back to cover excess loss.

Author - nkolen